Amazon & Holiday Returns

January 24, 2024

The holiday season has come and gone, leaving a trail of twinkling lights, joyful memories, and, unfortunately, a mountain of returns. While some Amazon sellers meticulously strategize and bolster their return infrastructure, others might be caught off guard, facing customer service backlogs, processing delays, and ultimately, reputational damage.

The question becomes: how can brands weather this inevitable storm and emerge stronger on the other side?

Firstly, sellers utilizing Fulfillment by Amazon (FBA) need to understand Amazon’s return policy, which is set to change in 2024. Starting June 1, 2024, the returns processing fee will expand to include all high return-rate products across all categories except for shoes and apparel. The fee ranges from as little as $1 to more than $150 per return item depending on the item weight. Whether a product qualifies as a “high return-rate” depends on the return rate relative to the average in your product’s category.

The best strategy for brands is to mitigate excessive returns, which requires understanding why customers return items. Thankfully, Amazon makes gathering this data easy, as customers who submit a request to return their order must choose a reason. Some reasons – like improper packaging or damaged items – may be within seller control, while others, like buyers changing their minds, are not.

Regardless of how efficient a business is at mitigation they should still expect returns – especially during the holidays. According to industry analysts, a staggering 42 percent of holiday shoppers return some or all their purchases. This makes top-class customer service to smooth over potential frustrations essential. As disheartening as it can be to accommodate entitled customers, providing quality customer service – driven by sound communication – is key to 5-star reviews and brand loyalty. 56 percent of shoppers that face a poor return experience never purchase from that brand again.

Smaller brands with limited logistical infrastructure may want to consider collaborating with third-party ecommerce specialists, which can ease returns and other logistical challenges. Here are some of the ways they can be invaluable:

• Enhanced customer service: Outsourcing customer service can ensure brands respond quickly to customer questions, troubleshoots issues, and guide customers through the return process, overall providing a positive experience even during peak holiday periods.
• Real-time data and analytics: Third-party consultants can provide valuable insights into return trends, identifying problem areas a business may face. By analyzing return reasons and customer feedback, brands can improve product quality, packaging, and communication, minimizing future returns.
• Reduced operational costs: Outsourcing return management can be surprisingly cost-effective, often resulting in lower processing fees and reduced personnel costs compared to in-house solutions.

Remember, preparing for the inevitable is key. In the dynamic world of ecommerce, proactive strategies and strategic partnerships are the difference between weathering the return storm and getting swept away. By partnering with companies like ZQUARED, brands can streamline the return process, enhance customer service, gain valuable data insights, and improve brand loyalty in the long run. If your brand can leverage the support available, the post-holiday tide can transform from chaos to an opportunity to grow and stand out from the crowd.

To learn more about how ZQUARED can help your brand, email us at partners@zquared.com.